📺 Stream EntrepreneurTV for Free 📺

Why Not Every Retailer Should Go Online Only A brick and mortar store and a personal approach might increase overhead but can help you build your customer base.

By Ryan Himmel

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

I am assisting my father in starting a business selling diamonds to local buyers. He has worked in the jewelry business for 30 years and has established connections that allow him to obtain diamonds of a higher quality than retail stores for a lower price. Our goal is to keep a very low overhead (no physical location or small office, and little to no stock). The diamonds will be ordered and received within a few days based on the buyer’s specifications. We plan to advertise initially by sending e-mails and letters to past clients, linking to our Facebook page and a company YouTube video. Credibility is important in this business and wondered if the Facebook page is enough of a digital presence. Also, we wondered how important a physical location and in-person visits are, or if we could do our consultations (for large purchases of $5,000 or more) through e-mail or over the phone.

While I’m generally an advocate of moving brick and mortar businesses and services online, there are certain industries that can’t yet consider an online-only model. The jewelry business is one of those industries. Instead of selling solely online, I would recommend also having a physical presence or at least in-person consultations.

First, only about 6 percent of all US retail sales occur online. The market has come a long way, but still most buyers prefer to purchase in person. Second, the jewelry business requires that the seller educates the buyer. This is very difficult to do via phone or email. You’ll need to explain the product and how great it is in person for the buyer to understand the value. Third, due to the expensive nature of diamonds, buyers will want to see and feel it before they spend thousands of dollars.

Related: Choosing a Retail Location: 3 Priorities You Might Be Forgetting

In terms of your online strategy, Facebook & YouTube may not be sufficient. While I understand you’d like to keep overhead low, I don’t think it’s in your best interest to rely solely on a Facebook page and YouTube video to support your online presence. A professional site builds trust in your customer base, essential for people spending thousands of dollars on your product. It’s really not that expensive at all to create an online presence with just a website that has limited functionality. There are many low fee turnkey web platforms such as Wordpress that can be very easy and cost-effective. Eventually, if you do intend to sell your product online, you’ll need to create an e-commerce site anyway.

Related: From Facebook to Foot Traffic: Building a Bakery's Social Network
 

Ryan Himmel

Head of Financial Partnerships, Xero Americas

Ryan Himmel is a CPA and financial technology executive who has dedicated over a decade of his work toward providing solutions to help accountants and small-business owners better run their firms. Himmel currently leads financial partnerships in the Americas for Xero.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Franchise

Franchising Is Not For Everyone. Explore These Lucrative Alternatives to Expand Your Business.

Not every business can be franchised, nor should it. While franchising can be the right growth vehicle for someone with an established brand and proven concept that's ripe for growth, there are other options available for business owners.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Passengers Are Now Entitled to a Full Cash Refund for Canceled Flights, 'Significant' Delays

The U.S. Department of Transportation announced new rules for commercial passengers on Wednesday.

Leadership

Why Companies Should Prioritize Emotional Intelligence Training Alongside AI Implementation

Emotional intelligence is just as important as artificial intelligence, and we need it now more than ever.

Business News

Elon Musk Tells Investors Cheaper Tesla Electric Cars Should Arrive Ahead of Schedule

On an earnings call, Musk told shareholders that Tesla could start producing new, affordable electric cars earlier than expected.